On July 28, 2023, sugar prices saw a decline, with NY world sugar #11 falling by 0.09 cents (-0.65%) to a 7-week low, while London ICE white sugar #5 dropped by 1.70 cents (-0.38%). The decrease was influenced by a stronger dollar and the potential for a US-Iran peace agreement that could facilitate sugar trade in the Middle East. Additionally, the closure of the Strait of Hormuz has reportedly affected around 6% of global sugar trade, according to Covrig Analytics.
Concerns over dry weather linked to an emerging El Niño pattern are also impacting global sugar production. The Japan Meteorological Agency confirmed the formation of this weather pattern, which may reduce rainfall in major sugar-producing regions like Brazil, India, and Thailand. India’s Meteorological Department noted that cumulative monsoon rainfall is 26% below normal as of June 12. The USDA predicts a global sugar production drop of 1.15% year-over-year to 180 million metric tons for the 2026/27 season, alongside a potential global deficit of 262,000 metric tons.
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